The above statement captures the essence of effective brand portfolio management. Essentially, the need to understand the emergence of brand portfolios takes us to the concepts of segmentation, target marketing and positioning.

Companies need to be in sync with the market dynamics. This includes the changing demographics and lifestyles of customers. As their income levels change, their lifestyles get transformed, thus resulting in the need for different products and services. Firms presently operate in a competitive business environment, wherein a couple of mass consumption products in different categories is no longer enough. The market has to be segmented into different groups and products have to be targeted at some of the segments. Positioning involves creating a fit in the minds of potential customers the suitability of the brands on offer.

Carrying segmentation too far has resulted in a scenario wherein the differences among some segments are getting blurred. The differentiation lies more in the minds of marketers rather than in the segments.

Given this background, companies are realizing that in their zeal to offer brands at various price points to as many segments as they could target, their brand portfolio is getting bloated. Obviously, they are unable to do justice to the marketing expenditure required to support all the brands in their portfolio. Witness for example the focus on ‘Power Brands’ by the global FMCG behemoth Unilever. More than 1,000 of its global brands out of its 1,600 brands are to be chopped off to focus on those brands which are either leading or show very strong potential of becoming leaders (in other words, ‘Power Brands’).

At the other extreme are the companies that believe in extending their well-established brands to other categories rather than launch new brands. They run the risk of diluting the core brand strength. At the end of the day, consumers would be confused about the core personality of the brand which has too many extensions.

As Keller puts it, optimizing a brand portfolio is not easy. Balancing needs to be done in terms of maximizing market coverage and avoiding brand overlaps. This book addresses different aspects of handling a brand portfolio, with fourteen articles placed in two sections.

Section I: Issues
What are the relationships among brands within a portfolio? What are the essentials of a brand portfolio strategy? How can a portfolio be managed to drive the overall corporate growth? Can brand management be quantitatively analyzed? Which symptoms signal a sub-optimized portfolio? How can brand portfolios be optimized? What aspects are involved in pruning a bloated brand portfolio? What constitutes a brand architecture?

The collection of eight articles in this section addresses the above issues, with inputs from sources such as MIT Sloan Management review, Mercer Management Consulting and Brandchannel among others.

“Brand Portfolio Strategy”, the first article, is written by Roli Sehgal and is a summary of David Aaker’s book of the same title. The book stresses the need to understand brand portfolio better. The reasons include studying the interrelationships among the different brands of the firm, clarifying each brand’s role and for directing marketing resources accordingly. Five dimensions of brand portfolio strategy are detailed – (i) Product defining role – whether a brand is a master brand, endorser brand, sub-brand or an umbrella brand; (ii) Brand scope – extent to which a brand can be extended; (iii) Portfolio role – understanding whether a brand plays the role of a flanker, cash cow or a strategic brand; (iv) Portfolio structure – examining the brand hierarchy, brand groupings and network; and (v) Brand portfolio graphics – visual representations used by the portfolio of brands. Brand relationships are grouped into three types – (i) House of brands (with negligible links and support); (ii) Endorsed brands (separate but mutually endorsing); (iii) Sub-brands, and (iv) Branded house (dominated by a master brand).

The second article is titled “Brand Portfolio Economics” and is sourced from Mercer Management Consulting. It is pointed out that effective management of the brand portfolio can drive the overall corporate growth. However, several critical issues crop up during the process. Is it cost-effective to launch a new brand to reach a new customer set or can an existing brand be repositioned? Can a brand lead into newer markets? Can some brands be used to protect other brands in the portfolio? Such questions need to be addressed. Some of the guidelines given to manage portfolios in order to drive growth are – (i) Aligning brands with business designs; (ii) Building a pyramid of brands, at different price points; and (iii) Growing winners and harvesting losers. Initiatives of Kraft Foods and Marriott group of hotels are also provided.

“Effective Brand Portfolio Management”, the next article, is a summary of the book Infinite Asset written by Sam Hill and Chris Lederer. The authors put forth the concept of Brand Portfolio Molecule (BPM), a map of the closely-knit brands that is used for quantitative analysis. It highlights how brands connect and relate to each another. Brands are classified as lead (enjoying customer pull), strategic (that lure new users or play a defensive role) and support brands. Stagnant volume growth and nested trademarks are symptoms of sub-optimized portfolios, according to them. Seven tools are described to optimize brand portfolios – (i) Brand extensions; (ii) Repositioning of brands; (iii) Pruning of the portfolio; (iv) Over-branding (using corporate brand or a division brand); (v) Co-branding; (vi) Amalgamation; and (vii) Scaling (creating another portfolio to fill gaps).

The next article is sourced from MIT Sloan Management Review and is titled “Achieving the Ideal Brand Portfolio”. Richard Ettenson, Sam Hill and Dane Tyson, the authors, point out that bloated brand portfolios fragment marketing resources and create marketplace confusion. They advocate complementing brand management with brand portfolio planning. The five-step brand portfolio renewal framework comprises – (i) Understanding the portfolio (preparing the list of brands to be reviewed); (ii) Assessing brand contributions (contribution relative to other brands in the portfolio, likely future importance, accounting for hidden costs); (iii) Assessing the market position (with respect to quality, price, customer service, advertising, trade partners, etc); (iv) Addressing problems and identifying opportunities; and (v) Developing a portfolio plan (which brands to sell, promote or demote).

“Global Versus Local Brands”, the fifth article, is a contribution from Randall Frost of Brandchannel. Globalization and economic liberalization led many MNCs to acquire several local brands in different countries. As a result, many of them manage big, unbalanced portfolios. Pruning such portfolios runs the risk of some long-established and well-loved local brands disappearing. The expectation of firms is that they will be able to make the customers of a dropped brand migrate to one of their other brands on offer. This is difficult to achieve, according to the author. He discusses the approaches of P&G and Henkel in this context.

The next article, “Forcing Brands into Early Retirement”, is also from the same source and by the same author. Here, the context for killing brands is referred to. Firstly, it is resorted to when there is an overlap between target segments. In their zeal to finely segment their markets, some companies go overboard, resulting in blurred segment differences and overlapping brands being marketed to them. Secondly, the power shift towards the latter in the manufacture-retailer equation is forcing several multi-brand companies to prune their portfolio. The reason – reluctance of powerful retail chains to stock more than a couple of leading brands in a product category. Thirdly, the costs involved in revitalizing the brands are high. Opinions of Prof. Nirmalya Kumar of London Business School and Martin Roll, CEO, Venture Republic (a branding advisory firm) are also provided.

Sourced from Business Line, the next article is written by Meeta Malhotra and is titled “Architect Your Brand”. Set in the Indian context, the article provides guidelines on handling cluttered and over-branded portfolios. The author describes three models of brand architecture – corporate brand, corporate brand as sponsor and standalone brands. Typically different brands operate as disparate silos, with little coordination or integration with other brands. However, there are examples wherein some corporates have resorted to integrated approaches. HLL, for example, integrated its coffee brands Bru and Green Label. Similarly, telecom company Bharti Group clubbed together its two other brands TouchTel and IndiaOne with its flagship Airtel brand.

“Regional Brands in Indian Brand Portfolios”, the concluding article of the section, is India-centric and discusses issues facing marketers of a portfolio of brands in this immensely heterogeneous market. Demographic differences get reflected through varying consumer preferences across the country. One of the responses of companies is to market different brands in different geographical pockets. Many companies thus handle several regional brands within their portfolio, some of which are acquired. Many critical issues crop up – scope for extending such brands to other similar regions, an acquired brand cannibalizing their own national brands and costs involved in maintaining a large portfolio.

Section II: Cases
The six cases included in this section capture efforts by Indian and global companies to address the issues discussed in the first section. Two global (P&G and Kraft Foods) and four Indian (HLL, Asian Paints, Paras Pharma and Dabur) cases are provided. These cases provide learning on how firms handle brand portfolio creation, its management and pruning.

The section starts off with the case “Kraft Foods’ Brand Portfolio Optimization”, written by D Gayathri of ICFAI Business School Case Development Centre. Some years back, the foods major operated more than 60 brands, spanning as many as 25 product categories. However, nearly 75% of its revenues came from just seven brands. Obviously cannibalization among its own brands was taking place. Other problems included growth in private labels by retail chains, competition and rise of low-carb diet alternatives. Realizing that its marketing resources were getting scattered among its different brands, the then CEO Roger Deromedi launched a programme Sustainable Growth Plan. As part of this initiative, small brands were divested and the firm focused on bigger brands.

“P&G’s Brand Management System”, the next case, is sourced from ICFAI Centre for Management Research and written by Vivek Gupta. The case traces the company’s approach to brand management over the decades. It markets brands in many product categories – home care, family care, beauty care, health care and foods and beverages. Upto early 1980s, it encouraged marketplace competition among its own brands. Later it switched over to category management to ensure that brands within a product category did not compete among themselves. In 1999, as a part of its six-year restructuring initiative Organization 2005, it reorganized itself from geographically-based business units to product-based global business units. In 2000, the company grouped brands to appeal to similar consumer groups (with similar attitudes and needs). This strategy was termed ‘cohort management strategy’.

Sourced from ICFAI Knowledge Centre, the next case is written by Gayatridevi N and is titled “Unilever in India: Building and Nurturing Brands”. As part of its global strategy to prune its brand portfolio, Unilever implemented its Power Brands focus through its Indian subsidiary Hindustan Lever Limited (HLL). Using criteria such as size, brand strength, brand relevance, competitive advantage and potential for growth, thirty brands were shortlisted. Marketing resources were to be focused only on these brands. Its FMCG business was split into two divisions – home and personal care, and foods. The former included soaps, detergents and personal products, while the latter comprised beverages, foods, ice-cream and confectionery.

The next case is titled “Asian Paints: The Power of Corporate Branding”, written by
N Shatrujeet and sourced from The Brand Reporter magazine. It captures the company’s shift from individual branding to umbrella branding. Upto the year 2000, it had invested heavily in promoting individual brands such as Apcolite, Utsav, Royale, Tractor, Apex and Touchwood. Realizing that there was a clutter among its brands for the festival platform it wanted to focus on, the company altered its brand architecture and made its portfolio corporate-brand centric.

“Paras Pharma”, the penultimate case, is also sourced from The Brand Reporter magazine and is written by Alok S Shukla. A niche player, the firm markets eleven OTC brands with five of them being the market leaders. Its cautious and careful brand launches are based on identifying unmet customer needs or foray into a category that is dominated by a single player.

The final case study, “Dabur’s Acquisition of Balsara Portfolio”, is written by Nandini Vaish and sourced from Businessworld magazine. Acquisition of Balsara added seven brands to Dabur’s portfolio of consumer care brands. The major benefit lies in registering a presence in all segments of oral care, with acquired brands Babool and Meswak filling up the gaps in its portfolio in the value and premium segments respectively.

 ¹“Building, Measuring and Managing Brand Equity”, chapter 11, second edition.